Private equity-backed insurer lured by quick access to capital through stock market
Torus could list on the stock market in 2014, following the completion of its envisaged structure with a Lloyd’s presence.
The insurer, launched in 2008 with private equity backing, has always had flotation in its sights. This is partly to allow its backers an exit route, but also to allow it to raise capital quickly.
“We would like to try to float in three to four years’ time,” Torus chief executive Clive Tobin said. But he added: “It is dependent on where the markets are.”
Stock markets have been volatile in recent months because of concerns about eurozone debt and the wider global economy. The UK stock market has not given insurers an easy ride of late. Even before the recent volatility, most listed UK insurers are trading at a discount to net tangible assets.
But Tobin is attracted to a flotation because of the speedy access to fresh funding it can provide. “When market opportunities present themselves, the ability to raise capital very quickly is much easier for a public company,” he said.
Torus achieved its Lloyd’s presence last week by buying Broadgate Syndicate 1301 and its corporate members from Israeli insurer Clal. The acquisition added accident and health, species and bloodstock business to Torus’s portfolio of specialty insurance products, together with the ability to eventually transfer some existing products into Lloyd’s.
Chaucer will continue to manage Syndicate 1301 on a turnkey basis, but Torus hopes to form its own managing agency.
Who backs Torus?
Torus was capitalised by private equity investor First Reserve in 2008. It received an additional $150m (£97m) equity investment from Corsair Capital in February 2010.
Where does Torus operate?
It has a FSA-regulated UK insurer, Torus Specialty and Torus National in the USA, a European operation and a Bermuda insurance platform.
Any previous Lloyd’s presence?
Torus provides the capital for Lloyd’s syndicate 2243 following its merger with Sideris Re at the end of 2009, under an agreement with Starr Managing Agents Limited.